runs deep. some positive news after the closing. nike. the problem with china, china just went from head wind to tail wind. that's a great research company. research emotion, we decided was not worth selling or shorting. is it something to write home about? it's not bad. what matters is the tone of the market is much better than the tone out of washington. like i said, there's always ait. right here on "mad money." i'm jim cramer and i'll see you tomorrow. good evening, everyone. i'm larry kudlow. so a crucial moment for our economy and for our right to bear arms. high drama on capitol hill right now as house republican speaker john boehner looks to pass his plan b fiscal cliff bill in a

million dollar tax threshold. votes aren't there yet. that's why we are following this live through the whole thing this evening. and as the president's new anti-gun violence task force starts work, we learn that now outside experts have yet joined that panel. meanwhile, the debate on gun control rages across the country. tonight we will hear from outspoken tv host piers morgan and former new york mayor rudolph giuliani. "the kudlow report" begins right now. first up, the latest on the vote of plan b. the plan b bill sponsored by john boehner that may decide how deep into january they have to go for a solution. may decide the fate of the economy and the stock market and decide the fate of jaohn boehne

and ultimate lif the second term agenda of president obama. john harwood joins us now live with all the details. good evening, john. >> reporter: good evening, larry. you know, the house has now passed on a party line vote, zero democrats in favor, about 20 republicans defecting the spending cut portion of john boehner's plan b. it would cut about $200 billion in spending, overt the automatic sequester cuts to defense programs that republicans have been opposed to. now, the debate bef bthe passage of that spending cut bill, and we still have yet to see the passage of the tax increase bill, which is gotten resistance from conservatives, that was an opportunity for both parties to frame the stakes, and eric cantor, the house majority leader, came on the floor and said, this puts the ball squarely in president obama's court. >> we house republicans are taking concrete actions to avoid the fiscal cliff.

absent a balanced offer from the president, this is our nation's best option, and senate democrats should take up both of these measures immediately. >> of course, democrats have no intention of doing that. they have an entirely different krun construction on what's happened with plan b since negotiations blew's a few daysation. on the budget committee, came out saying it was a waste of time with the clock ticking. >> we are engaged here in the house on this floor today in what has become a ridiculous political stunt which will actually take us much closer as a country to going over the fiscal cliff. >> the question's going to be, larry, of course, can negotiations resume after this happens? senate says they won't even take this up, the plan b, if it passes, as house leaders say it will tonight. the question is, what are we going to have -- private negotiations between the speaker and president over the weekend?

will members come back and have something to pass or in fact go over the cliff and everyone see the consequences. democrats counting on their hand only getting stronger over time. added seats in the house and in the senate and believe that the business community, if they see markets going cadrazy, puts mor pressure on the republicans. pretty unpredictable now. >> can i ask you a couple of questions to clarify? >> sure. >> you mentioned a procedural vote. republicans lost 20 of their own. is that true and what was that procedural vote all about and is it apock kraful of the vote? >> lost 20 members. i think 21 was the final member. on the spending cut portion of the bill. remember, larry, the spending cut bill didn't exist in the original plan b. that only was going to be a tax increase bill on million dollar incomes. john boehner added that because there was so much conservative resistance to the tax increases, that he had to have a sweetener for some of the conservatives.

now that's passed. we'll see if he can hold his members and whether democrats come over and vote on this bill to raise taxes to the million dollar -- >> they can still pat the overall measure? lose 20 and win -- >> they can. how they passed given the number of people not voting, yes. that's how they passed the spending cut bill. >> great. john harwood, thank you. we'll see plenty of john as the evening goes on. our special guest, illinois republican congressman aaron shock. welcome back to "the kudlow report." give me your assessment. >> good to be with you. >> does plan b pass, and now with this added spending cut, is it more likely that plan b will pass? >> well, larry, i just left the house floor moments ago as a member of the whip team. i'm confident that speaker boehner has the votes for plan b. this is a good proposal not only for our republican party, most importantly, a good proposal for the american people. you know, larry, some people in

our country and some people within our party believe that republicans have the white house, the senate, and the house, and the fact of the matter is, after $2 billion being spent in the last election, we have divided government. and so in a perfect world, what i love no one's taxes going up? would i love low marginal rates to spur growth? the best prescription? absolute absolutely. we have a president who just got re-elected saying it is his mission to raise taxes on small businesses and individuals who make more than $250,000 and john boehner made the right play call saying we're going to use nancy pelosi's own words and chuck schumer's only worpds againds a them and say we're going to cover, because the president's not working in good face with us, 99% of americans in small business don't see taxes going up in january -- >> are you expecting nancy

pelosi to get her joet she said make the threshold $1 million. have you tried to whip her today? >> absolutely. it's funny. people on shows like yours saying democrats say they'll never call this for the vote. well, democrats six months ago said this was their plan. so let's ask chuck schumer why he's changed his mind on saving 99.8% of americans? let me add this to viewers. people aren't cove erg the other good part of plan b. the estate tax, which i know millions of american, small businesses and family, family farms in my distributor worried about, would go back to $1 million on january 1. if plan b becomes law, we not only keep the $10 million exemption for couples and make it permanent, something that couldn't happen even under president bush, but we get it tied to, indexed for inflation, again, it's something that sb not in current law. we also make the capitol hill gain rates permanent at 20% for all earners, even above a million. that's huge. >> the estate tax, permanently

at 35%? >> correct. >> then you'll have the capital gains tax, 15% to 20%. what about the dividend tax, congressman? 15% to 20% or 15% to 44%? >> well, if we don't do anything, as you know, it goes to 44% on january 1. plan b preserves it at 20% for millionaires and above, 15% for those below a million. small busine bus and individuals. >> and all of this you've described will be permanent? is that correct? no more five-year, ten-year -- >> that's correct. >> all permanent. that's where the trouble started anyway, 10, 12 years ago? >> absolutely. one thing that is the cornerstone of republican policy on taxes is, give certainty. the one thing we hear from small businesses and large businesses is, just tell us what the rules are so we're not laying awake around christmastime wondering whether or not if grandma passes away in january, are we going to lose half the farm or half the small business. this gives families certainty

not just next year but really in perpetuity here in our country which that certainty is so key. >> what's your guess? last question, congressman, aaron schock from illinois. what's your guess, your vote count right now? >> well, i don't -- one thing they tell you as a whip, never reveal your vote count. i'm confident we will be successful in the house in passing this proposal and my money is, when it gets closer to the new year, those senders, like chuck schumer and others, who promised their voters that they would try and protect filers below $1 million at the end of the day, acquiescing -- >> comes on the radio and tv, tell him i'd like to talk to him. the head whip, the main guy ross ki roskins? >> he and kevin mccarthy. >> right. we appreciate it. let's bring in our distinguished panel with us throughout the hour.

they may be here for days. we'll remain on the air until we get that final vote that mr. schock talked about. here's cnbc contributor keith boykin, former clinton would you do aide and having fun tonight watching the republicans, and we welcome back heather higgins, president and ceo of the independent women's voice. heather higgins is this a good or bad bill, plan b? >> it is the best that boehner can do in an awful situation that he's in, and he's in an awful situation for a variety of reasons. not least of which is poor messaging on the growth message. the average citizen just thinks this is about keeping tax rates low for rich people, and that republicans don't care about the middle class. they don't understand that tax increases are really bad for growth, and what this whole debate ought to be about in terms of entitlement reform and keeping taxes low is growing the economy, because that's how you actually get out of this pickle. >> i want keith to chime in on this message. let me ask you this. has john boehner and the rest of them, cantor, eric cantor,

haven't heard much of him throughout this whole thing. paw ryan, paul ryan budget mfte out yesterday saying he's in favor of plan b. all of them together after the election whipping, is the republican party still looked at as the party of economic growth? the message you outlined with which i basically agree, that jack kemp sends a message, keep tax rates -- flat tax -- has the gop lost that message? >> they certainly don't articulate it to the extent we would like. they tend to leap right into the details and forget to frame the case, and you hear this all the time. if you listen to talk radio. not the republican talk radio, but anywhere else, if they're reporting on a news event, and it's unfortunate, because, really, what the republicans are about is helping those 23 million americans who don't have a job get a job, and obama is spending more money taking it out of the private secretarier into more government spending is not the way to get us to 4%

growth. >> just capping deductions, gone from the private sector to the -- great point. keith boykin, back to you. you heard what heather said, what congressman schock said. what does this vote mean to president obama? how do you see this? >> the plan b vote? >> yes. >> i don't think it means much because it's not going to become the law. i don't think anybody here thinks it's going to become a law or anybody on the hill thinks it will become a law. bakaly an exercise the republicans deciding they have to put up the show of looking like they're serious. this may be the best of john boehner can get. i agree with you on that. at least for today. but come december 31st we're going to have an issue here and somebody's got to blink, and this is not going to be the resolution to the problem. i don't know what this vote really means. >> i'm going to come back to that political point. a very point one but i think we have congressman jim jordan, if i'm not mistaken from the great state of ohio. she the leader of the republican house -- republican study committee, regarded as the conservative wing of the house republicans. jim jordan, welcome back, and.

>> good to be with you. >> we heard from a rather optimistic aaron schock, your colleague, that this thing's going to pass tonight. do you agree? >> well, we'll see. it doesn't pass until they have the vote. i know there are people with concerns. i'm not voting for it. i think it's not the direction to go. he said it best. if anyone thinks this bill will become law they're not in reality. if this is not going to be taken up by harry reid and sent back to us in the same form, larry, why would we pass it? why wouldn't we pass something we truly believe in, which is is not having taxes increased for any american so that we can have the kind of environment that's conducive to economic growth, so that moms and dads can afford to pay for their kids' college, get the job opportunities they need, pay for their kids to go to private school, whatever. why wouldn't we pass what we know we're for and what our party's always stood for? if we know harry reid is not taking up the bill. that's the part i don't get at all. >> let me ask you this. your a nay vote, as understand.

nay vote on tax cuts, lack of spending cuts or both? >> three thing. tax issue, underlying policy. cut spending, everyone understanding that. and i fail to comprehend the strategy when we're going to send a bill over there we know -- the white house said they'll veto. harry reid doesn't know if he'll take it up's if he does, it's not going to be sent back in the same form. there's already legislation over there we passed august 1st extending all tax rates. last night, nick mulvaney, steve and myself went before the committee, took the bill to pass, the only one to pass in bipartisan support. took it to the rule it's committee. offer this same thing. the only plan with bipartisan support, only plan that passed the house or senate. send it again to harry reid and say take it up. you want to change it's the process working, send it back we'll look at that issue. >> would that -- let me

understand. would that bill extend all the tax rates? >> yeah. larry, we passed that bill august of 2012. >> in the summer. >> took that same bill, put it in amendment form, went to the rules committee last night, askedal the rules committee to make an order to offer on the floor tonight on a plan-of-vote on plan b, it was not made in order, even though every republican voted for it and 19 democrats voted for a and we know what we're sending over there is not going to be sent back in the same form. why not send what we're for? >> could have forced a vote in the senate. possibly. >> just as likely as what's we're sending there now harry reid says he's not for. that's the stra teae strategic don't get. >> from john harwood, spending cuts, $10 billion over ten years. kweisi sequester, i'm not sure what it is. came at the last minute to get votes from your conservative colleagues. does it work? >> well, remember, it's not a --

we just passed that legislation just a couple minutes ago on the house floor. it's not attached to this bill. that's going to go over there. that piece of peep will likely wind up in the trash can at harry reid's office. what i figure. it's not attached to this legislation. it's good we tell the american people we think you should replace the defense cuts. cut spending elsewhere. makes sense constitutionally and is good for the country but not attached to this sledge slalegi lot on plan b going over there tonight. >> many thanks. outspoken. appreciate your honesty. former mayor rudy giuliani knows about gun laws and is about to speak with us about several topics straight ahead. don't forget, free market capitalism, the best way to prosperity. flat tax rates, getting rid of deducti deductions, 20% of gdp. that's kudlowian. we'll be right back.

nbc chief washington correspondent john harwood coming buy wack breack with bre >> the house of representatives got into an unscheduled recess before they were beginning debate and final passage voting

on the tax increase bill that john boehner offered as plan b. that recess usually means that they lack the votes to pass the bill. now, that's what democrats believe. i've not heard back from representatives of the republican leadership as to whether that's the reason, but there's no really much other reason why members, why the house would say, we're going to recess for a while, subject to the call of the chair, unless the leadership and the whip operation for the republican side was having trouble rounding up the votes. remember, this is a vote to raise tax rates on million dollar incomes and you have a lot of republicans who are adamantly opposed to raising taxes on anybody. i'm watching my blackberry. we'll see what the members of the leadership and the leadership aides, how they respond and how quickly the house comes backs, but it looks as if the plan b tax increase bill is in trouble. it that's true, that would be a big setback for john boehner, if he thought this move was going to put pressure on the obama

administration. >> huge, huge. >> in the negotiations. >> huge setback. couldn't agree more, john. huge setback. quickly, paul ryan and grover norquist endorsed plan b. does that work? help the whip gets votes in line or not? >> sure it does. but it does not help, the club for both freedom works and organizations politically active on the campaign trail and legislatively said, no, don't vote for this. i think that could have created some complications for them. we could lose 20 members. they showed that tonight on the spending cut portion of the bill, but they can't lose a lot more than that. can't lose 30 members, and there were counts earlier today showing they lacked 30 votes of republican members of the house. so we'll see whether they can put this back together and how serious this problem is. >> all right. john harwood, thanks very much for the update. i said earlier, we'll see a lot of john as the evening proceeds. now, my great pleasure, welcome back to the show, i call

him america's mayor. the former mayor of new york city. rudy jew rudy giuliani. most folks want you to run again, former mayor, but i don't think that's in the cards. let me begin with an easy question. what do you make of this millionaire's threshold? john boehner's plan b, spending cuts, tax rates? you tell me. >> i agree with heather. probably the best john boehner can do. difficult for the republicans. 80-plus just ran four years ago with a promise they wouldn't raise taxes. i can understand why he's having trouble getting those votes, but i think he has no choice but to the try to pass snag soomething pushes the ball back into the president's court. the passage of the spending decreases was important. that's really where the emphasis should be. in tan ideal world, shouldn't raise taxes, shouldn't give the government more money because they're wasting money.

we're not an an ideal world. i think john boehner, plan b is probably the best he can get. >> ask i ask, the other side of heather's point, republicans are losing the messaging battle. >> no question about it. >> a threat they're losing the messaging battle? >> the point made about tax increases not about the rich, poor, or anybody else. not giving a government wasting way too much money more money to waste. as you were, i was part of the reagan administration. the idea, don't feet the beast. star -it- -- feed the beast. you'll start to get efficiency. the only way to grow the country, bring jobs back to the country. we should talk about the conclusion. this is how you bring jobs back, get the 4%, 5% growth. that's the conclusion. we should be talking about that. as a subpart of that, this is the reason you have to keep taxes low. why you have to get spending under control.

it's really a question, as heather analyzed it, i always did as mayor. really a question of how much money do you want the government to control and how much do you want the private sector to control? >> first of all, i couldn't agree more with you and heather. let me just ask you. it sort of bothers me that the so-called sequester, the across-the-board budget cut, determined last year, $1.2 trillion over ten years. a lot of us wanted a much bigger cut. at least it was $1.2 trillion. today last minute speaker boehner put in $200 billion. how, when, where and why will they ever cut spending? that seems to be a message every single opinion poll. i think spending cuts are more important than the tax story. >> i think that's probably what we should have focused on a lot more than we should have on taxes, and i think that's probably the mistake the republican party made in not explaining to the american people that our fiscal cliff is what's going to happen over the next five to ten years. i just looked at a chart that

shows health care spending basically in about 20 years taking oevg ver the entire fede budget. nothing left to spend on defense, law enforcement. down to something like 7% or 8% of gdp and health care up to something like 24%. it's ridiculous. >> and they're going to kick that one down the road. no entitlements in this particular -- there is no grand design. look, that will all be next year, and i just call it manana. with much fanfare, president obama announced vice president biden would run this internal commission to look at gun laws. not a commission of outsiders. all insiders, all members. that bothers me. do we need reforms of semiautomatic gun, reforms of the large magazines? how do you see the gun control issue? the way i look at it is this way. first of all, i think it was a mistake to appoint just an

internal administration, whatever you want to call it committee, commission, because he's going to need to get, in this case need to get some democrats to come over who are opposed to any form of, further gun control. the idea that an assault weapons ban would have prevented this crime is absurd idea to try to present to people. first of all, there's an assault weapons ban in connecticut to start with. secondly, a killer like this, a man who's as demented as this man was andbrilliant as he was, he's going to find away to do it with weapons. kn not with weapons, he'll do it with bombs and other weapons. i see why you can't have a reasonable restriction on assault weapons. i'm perfectly okay with that. i'm not okayky trying to prevent a simplistic answer.

this is about mental health. our ability to track people, incarcerate people who harry mentally ill. about our ability to understand why they're acting the way they're acting, stricter law enforcement in those areas. you another, new york city has very low crime. we have very strict gun control in new york city. chicago has very high murder rate. they have the same strict gun control in chicago. i never thought it was about gun control. in and of itself, gun control meaning assault weapons control is worth taking a good look at, but the way the president is presenting this, he's going to run into problems with his own democrats who are worried about, you know, worried about gun control. i intelligent way to do it. >> with outside experts. the front of the "journal." the web page, it says, they've lost -- listen to this. they've lost millions of mental health documents in the process of gun purchases and

registration. millions of documents, mayor giuliani. >> right. >> they wouldn't know how to document somebody with mental illness or whether they've been in psychiatric care. they've lost -- it's all a complete mess and shambles right now. >> it is. and the reality is, if he had appointed a commission that would look at mental health, take a look at the way violence is presented in movies, the way violence is presented in our culture and take a look at assault weapons, and present a comprehensive picture, i think he'd have a much better chance of getting the assault weapons ban passed. i'm telling you, i know a lot of republicans don't like this, but i'm in favor of an assault weapons ban. i i don't see any problem taking military weapons away from people. >> what about the military videos? last one, mayor. crazy, violent videos? this kid was an addict to it. somebody did a study, a lot of

mass murd murderers have been addicted to the mass murder videos? >> we sure as heck could have a much stronger conversation about it, a lot more incentives and pressure to try to stop a lot of this which is very, very destructive. it really doesn't help. but the main issue here is the whole mental health issue. it's the way in which we -- we -- we let people out of mental institutions and mental facilities years ago, and we never figured out how to deal with it in the community. never figured how to have the services necessary in the community. >> going to leave it there. many, many thanks to america's mayor, rudy giuliani. appreciate it. breaking news. appear to have hit a big speed bump in john boehner's plan b, expecting a vote this hour. our own john harwood reports republicans don't seem to have the votes to pass it. we'll be right back with more live coverage on this breaking and developing story, next up. bob, these projections... they're... optimistic.

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to chew on this we bring in our pam. heather and interesting our congressmen, at least one of them, wanted to know why the republican party is going through this plan b exercise. that was conservative house member jim jordan. why are they going through this? >> well, one alterly sympathizes with his point of view. he had great legislation. tried to bring it up again in a

current form. the reason that they're going through it is that the republican party has essentially two pieces. it has the highly conservative fisk fisk cale fiscally aware and really upset, tea party, about the division of americans into different classes and they understand once you start doing that, it's just a question of the george bernard shaw negotiation over how much are we going to be doing this? so they understand that. the problem boehner has is that he needs to call obama's bluff. obama i believe, contrary to 208108 when he needed to be re-elected and actually extended tax rates for everybody because he didn't want there to be a recession now no longer has that pressure. he can be an ideologue. the average american and the average reporter, frankly, who

doesn't really understand economics needs to have on the table something that says to obama, here. you said that you wanted to extend the present tax rates for everyone who was not a millionaire. we're offering you this. so the burden goes from the republicans raised tax rates to obama didn't follow through -- >> lost, heather, already lost. >> barely raised. not all right lost. the entire media story has been on the taxing side. appalling they never talked about the divisions on left about spending cuts. >> let me explain. when i say been lost. we already had the issue? nancy pelosi talking about a million. the president who ran the campaign, the number 250. the idea that a million versus 250 or 400 means the president is going back on his word, that's not how the american people see when look what was said during the election. that's a waste the argument. >> everybody's tax rate when the he actually cared about the --

also ran on saying he was going to have $s 3 or $2.50 of spending cuts for every dollar of revenue. not doing that. barely a dollar to a dollar and doesn't care about revenue. >> the president made a number of concessions. he's moved from $1.6 trillion down to $1.2 trillion in terms of revenue. up from 250 to 400,000 in terms of income cutoff. moved on corporate taxes. moved on entitlements. the guy made ach lot of concessions. >> put them on the table. >> moved on retirement age. >> no. just said -- >> moved on the c.o.l.a., and -- >> saying he's being flexible does not mean he's being flexible. >> it's gone on entirely too long. republicans want to cut the deficit. the fiscal cliff will do it but in a draconian way.

the reality setting in now for americans is we don't want to cut the deficit too fast. even the republicans most ambitious proposal doesn't actually eliminate the debt and cut the deficit in the year 2012 -- 2020. >> tris is the objection from the club for growth and other conservative groups. the fact it doesn't commit to major spending cuts and major growth and most of all to major deficits. if my math is right they're predicting about $8.5 trillion of deficits in the next ten years, of new debt. $8.5 trillion that's a very big number. the source of republican discon tenchts the republicans are really upset you are once again seeing playing out real tax increases now with hypothetical spending cuts later. eventually. maybe. that never happen. and they feel like, i'm sorry. lucy with the football. you've done this way too many time. that's why the base is so unhappy about this. >> you really haven't heard -- i

know president obama, particularly on the c.o.l.a.s, the cost of living, he has said that. other stuff, vague and imbigu ambiguous. >> you need to have hope for the change. >> last, before we cut out. is the president going to cut spending? that's really the issue? will he cut spending? >> real spending now cuts. not hypothetical eventual future cuts? >> yes, he will, but the reality is none of the spending cuts that anybody's talking about are really serious, because if you really want to cut the deficit you have to really cut medicare and social security. two things that the republicans and democrats both-- >> hold that thought. breaking news. of course, keeping a close watch on capitol hill and we have more breaking news. i've learned speaker boehner is about to call a special republican caucus in less than ten minutes. right now, the house has just gone into an unexpected recess and our own john harwood says this could mean the republicans just don't have the votes to pass boehner's bill. our live coverage on this

breaking story continues right after the break. please, stay with us. ♪ [ engine revs ] ♪ ♪ [ male announcer ] the mercedes-benz winter event is back, with the perfect vehicle that's just right for you, no matter which list you're on. [ santa ] ho, ho, ho, ho! [ male announcer ] lease a 2013 ml350 for $599 a month at your local mercedes-benz dealer.

welcome back to "the kudlow report." we are keeping a close watch on capitol hill tonight, waiting a

house vote on speaker boehner's plan b tax cuts. breaking news. appears the gop does not yet have the votes to pass this plan b bill. speaker is about to convene the republicans into a special caucus that's usually not a good sign. and right now we don't even know if they'll be a vote tonight. we're back with our panel, cnbc contributor keith boykin and heather higgins of the independent women's voice. joining the discussion, our friend, ben jealous, president and ceo of the naacp. welcome to our gathering tonight. >> thank you. >> do you -- give me your quick take on this plan b? do you think it works? spending cuts? tax extensions. does it work? >> look, you know, the real issue here is who gets hurt? and who's not really being touched. and you know it is good to see some concession that we're willing to tax those who make more than $1 million per year. should have been there a long time ago. nice to see the folks come to

that point. what concerns me, you're looking at cuts for social security, for health care, for, you know, people who really live at the edge. that's going to hurt those people. it's also going to hurt their -- the small businesses where they live, because these are people who -- who when they receive a dollar, they spend it. and so if we cut their social security, then we're also going to cut the dollars that are circulating throughout their entire town. >> just to the clarify. you're talking about the cost of living adjustment. i don't want to get into the -- >> no, no. >> is that what you're talking about? >> no. i'm talking about what his plan is. that he pushed through plan b. right, you will see, real cuts to real -- things that people actually, you know, need to actually survive. you know. you'll see a cut to health care. the -- plan to actually put the aca into place simply cannot go

through with this plan. so we're talking about real cuts to folks' real lives. that's an important point of what's going on. >> fair enough. really more down the road. you heard ben jealous worry about that. let me just ask you -- >> the aca is going to raise health care costs monumentally. >> that's not a budget -- >> yes it is. >> reduce costs for consumers and cut the budget deficit by 1 $180 billion. what's the base of your projection? you're pulling it out of the air. >> no, i'm not. the congressional budget office keeps making costs increase from what they originally projected. now that various individual plans and firms are costing out what they're going to have to do, you're saying far more firms are going to be not covering people. this plan was conceived in a way that didn't understand the economic consequences. >> just to the clarify, the aca, obama care. >> yes. the affordable care act. >> basically protects --

>> anything but protect patients or be affordable. it is orwellian. >> another old debate. this is what happened -- >> anything that you don't like is an old debate. we're not allowed to bring it up any more. >> bring it up all you want. we had an election. >> that never mentioned obama care. >> oh, my gosh. >> bring in my friend ben jealous. either way, ben, either way, if the cost goes up, then the lower income people have a problem. if the benefits go down, the lower people have a problem. so the claims made by obama care that will cut costs, isn't that going to hurt poor people just as much? >> look, what's going on here, quite frankly, still plan b passes. what happens then? it's d.o.a. this is really -- you know, just -- just sort of a dance being done in washington. what the people in this country want is people just to stop posturing. say, look, we've got to tighten the belt. we're going to ask the richest

people in the family to tighten their belt the most. we're all willing to take cuts, but we're not going to cut things that actually keep people from eating. we're not going to make cuts that drive people into bankruptcy. you know, health care costs are the number one cause of bankruptcy in the black -- community. and so, you know, we've just got to have a common sense conversation and this is not that. >> hang on. we're going to come back. keeping a close watch on capitol hill tonight. a house vote on speaker boehner's plan bachlt la late. the vote delayed. not a good sign. omnipotent of opportunity.

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so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. welcome back to "the kudlow report." again, breaking news here is that house speaker john boehner, gathering republicans into a caucus right now to vote on his plan b fiscal cliff has been delayed. not a good sign. let's get quick market reaction. we have our pal jim, director at atj and i don't know if that's right. tjm institutional services. i had to ignore the prompter and just know that's where you are. >> thank you. >> so it's a pleasure.

what happens if plan b goes down, and chaos ensues? what's that do to tomorrow's market, for example? >> the record is slightly disappointed. s&p lost four, five handles since the rumor leaked it was d.o.a. the market has been buoyant over the last two days. a good part of that based on plan b. this plan b is definitely a shout across from republicans, something oddly unusual, it's a really night political strategy for republicans to put them on equal ground because for years obama's been repeating millionaire, billionaires. there's nor millionaires. negotiate from spots of equal strength. the market will be disappointed if this is dead. i expect it to loses about another four handles on the actual announcement. >> very interesting to me. this is the least worst tax bill we've seen. okay? >> no doubt. >> in fact, it includes, as we learned earlier, cap gains tax, so important to stocks. 15% to 20%.

the dividend tax also important to stocks, 15% to 20% rather than 44%. those elements of the bill, very pro--growth and pro-stock market compared to other punitive things. if that all goes away jim, do you think just a small sell-off or will chaos assume and people are worried they won't get it done and we will jump into the fiscal cliff? >> if plan b is dead, we get somewhat of a sell-off now. 10 to 15 handles. not a big deal. someone will say something to placate the market and make us believe everything will be fine and we'll ficker things out. in our business we always say, there's a buy the rumor, sell the fact. that means the market tends thing in brb the market comes out. we're setting ourselves up for a fairly large one once pe settle the fiscal cliff issue and after the deadline, by the way and republicans able to dial back to what they want. >> yeah. i think that's ride.

the deadline may well pass and a defeated vote may improve the chances the deadline may pass. thank you very much, my friend. back after the break. please, stay with us. breaking news. it around good. still in limbo. the house remains in an unexpected recess. not good when looking for a good vote. all about speaker boehner's plan b, which really is in my opinion, the least pro-growth factor out there, but it may not survive. well, if it isn't mr. margin.

mr. margin? don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob. i know.

welcome back to "the kudlow report." again, breaking news. house speaker john boehner gathering republicans into a caucus right now. the vote, his vote plan b fiscal cliff bill is delayed. let me put in a little bit of notion here. i've never been in one of these, because never been a house member, but basically, the republicans will leave the floor and go into a meeting room just off the floor. this is inside the capitol on the house side. several meeting rooms where they can go. undoubtedly, speaker john boehner will be the principal man to talk to them, and he's going to once again make his pitch to pass the plan b. it's extending the tax cuts to $1 million permanently and also added spending cuts earlier this evening of a couple hundred billion dollars. a fair a money. boehner will make his pitch. he needs help, needs support. our own john harwood surmised

they might be short 20 votes. can't lose 20 votes. undoubtedly, majority leader cantor, strong pro-growth side republican backed plan b from the get-go will speak to the republican caucus in this so-called recess in the capitol. and finally, head whip, number three republican, kevin mccarthy, he also will ask for their help. people will say, is boehner going to twist arms? i can't tell for sure, because i'm not in there but i would just say that has not been john boehner's style, to twist arms. you make an intellectual argument. may make a political argument, vis-a-vis, his position in the gop and the white house, but i do not know him to give away judgeships and waterways and dams. i saw a little of that in the earl '80s when i worked for reagan, but i don't see that now. i could be right or i could be wrong. we got ben jealous and heather higgins here. ben jealous, do you think i got that about right? boehner's going to make a pitch. cantor's going to make a pitch

and mccarthy make a pitch and the fact they're are in there. >> paul ryan. >> the fact they're in there says they're in trouble. >> yes. the fact that they're there says they are in trouble, and speaking of somebody who was once a page way back when, you know, they will turn to paul ryan to look to him to give encouragement to the troops. the only one who can speak to the kind of crazy folks who right now are not with their speaker. >> a great point. go to paul ryan. i wonder if they're go to grover norquist and do it on a telephone loud speaker? grover backed it. >> to get the flavor about this. when you had boehner disciplining certain house members and taking them off committees. particularly the three who were conservatives, even though he replaced them with conservatives, that started a fund-raising opportunity for a lot of groups that felt he wasn't being conservative and felt part of the reason the election was lost was that those principles had not been

sufficiently articulated. now there's been with a number of groups campaigns going on, fund-raising campaigns, you know, let's replace boehner as speaker. and this particular issue also, you can understand precisely why conservatives who feel so frustrated want to see a serious spending -- serious spending cuts and no give at all on the tax break. >> over 10 years, $20 become a year is not serious enough. >> right. what i worry about, in part they've bought into the media mean, which is that, well, boehner might give, but if harry reid says he's not going to give, he's never going to give. that's not necessarily true. >> that is really bad. political negotiation with yourself. really a bad idea. >> look at this all the way through. negotiating for themselves. >> terrific stuff. out to a break. heather higgins, thank you. ben gel oushgs terrific stuff. rear here on "kudlow" special live fiscal cliff vote coverage. we're going to continue. not going anywhere. house in unexpected recess as

speaker boehner is undoubtedly giving them a pep talk and maybe paul ryan, too. we'll be right back. i'm larry kudlow. [ female announcer ] if you care for someone with mild to moderate alzheimer's, you'll also care about our new offer. you get access to nurses who can help with your questions. and your loved one can get exelon patch free for 30 days. if the doctor feels it's right for them. it cannot change how the disease progresses. hospitalization and rarely death have been reported in patients who wore more than one patch at a time. the most common side effects of exelon patch are nausea, vomiting, and diarrhea. the likelihood and severity of these side effects may increase as the dose increases. patients may experience loss of appetite or weight. patients who weigh less than 110 pounds may experience more side effects. people at risk for stomach ulcers who take certain other medicines should talk to their doctor

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